The U.S. Court of Appeals for the D.C. Circuit with a 2-1 vote reversed a lower court’s ruling that forced President Donald Trump’s administration to pay $2 billion in USAID funding.
The district court erred in granting that relief because the grantees lack a cause of action to press their claims. They may not bring a freestanding constitutional claim if the underlying alleged violation and claimed authority are statutory. Nor do the grantees have a cause of action under the APA because APA review is precluded by the Impoundment Control Act (ICA). And the grantees may not reframe this fundamentally statutory dispute as an ultra vires claim either. Instead, the Comptroller General may bring suit as authorized by the ICA. Accordingly, we vacate the part of the district court’s preliminary injunction involving impoundment.
Now, private parties cannot sue the government over impoundment, reducing the number of lawsuits.
The parties also decided the defendants did not satisfy the “ultra vires” test, which is a claim that an official or corporation exceeded their legal authority.
There are three prongs, and the defendants failed the third prong: “the challenged action is ‘plainly’ in ‘excess of [the agency’s] delegated powers and contrary to a specific prohibition in the statute that is clear and mandatory.’”
The Court wrote:
Here, the grantees fail to satisfy the third prong of the ultra vires reviewability test. The ICA provides that the Executive may carry out lawful impoundments subject to certain procedures and restrictions and the grantees can point to no specific prohibition the defendants have violated to an extreme and nearly jurisdictional degree. And the district court’s analysis applying the major questions doctrine is irrelevant to a Kyne inquiry. See AVAC II, 770 F. Supp. 3d at 148 n.18. Instead, and as in Nuclear Regulatory Commission, the grantees “basically dress up a typical statutory-authority argument as an ultra vires claim.” 145 S. Ct. at 1776.
“Because the grantees lack a cause of action, we need not address on the merits whether the government violated the Constitution by infringing on the Congress’s spending power through alleged violations of the 2024 Appropriations Act, the ICA and the Anti-Deficiency Act,” wrote Judge Karen L. Henderson, who penned the decision.
The plaintiffs could ask to have the case reviewed en banc, meaning the full panel of the Court would do it.
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